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How do entrenched managers handle stakeholders interests?

Author

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  • Chung, Huimin
  • Lin, Jane Raung
  • Yang, Ying Sui

Abstract

This study examines the impact of managerial entrenchment on non-shareholding stakeholders. We find that managers tend to focus different levels of attention on specific non-shareholding stakeholders relative to their level of entrenchment. When managers have greater protection, they tend to establish good relationships with certain stakeholders, particularly with regard to the natural environment. However, well-protected managers attempt to minimize any damage to workforce diversity and often increase the damage to the employees and the natural environment. Entrenched managers pay more attention to stakeholders who can have a positive influence on the short-term financial performance of the firm. However, negative social actions have insignificant effect on financial performance.

Suggested Citation

  • Chung, Huimin & Lin, Jane Raung & Yang, Ying Sui, 2012. "How do entrenched managers handle stakeholders interests?," Journal of Multinational Financial Management, Elsevier, vol. 22(5), pages 263-277.
  • Handle: RePEc:eee:mulfin:v:22:y:2012:i:5:p:263-277
    DOI: 10.1016/j.mulfin.2012.10.002
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    References listed on IDEAS

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    Keywords

    Managerial entrenchment; Corporate social responsibility; Anti-takeover provisions; Environmental stakeholder; Financial performance;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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